The face-off between Delhi’s three power distribution companies — controlled by Tata Power Ltd and Reliance Infrastructure — and the state government intensified on Wednesday with the three writing to the additional secretary, power, reiterating their stance there was no reason for a Comptroller and Auditor General check even as the government ordered a CAG audit of their finances, reports fe Bureau in New Delhi. Chief minister Arvind Kejriwal said the CAG had said it could conduct the audit, adding that the lieutenant governor’s order on the audit would go to the CAG on Thursday.

The discoms have said the matter was sub judice and that their accounts were, in any case, being audited by a CAG-approved panel of auditors. They have also said that their purchases of power were subject to the scrutiny of the Delhi Electricity Regulatory Commission.

On Tuesday, the Delhi government said it would subsidise 50% of the tariff for users consuming up to 400 kWh of electricity a month. “The balance after subsidy will be paid by the government and the decision does not impact us,” Pravin Sinha, chief executive of Tata Power’s Delhi distribution entity told a television channel. Meanwhile, DERC chairman PD Sudhakar said that since there was a perception of a problem in the accounts of discoms, the regulator’s official position has been one favouring a CAG audit — the DERC’s affidavit in a public interest litigation by Prashant Bhushan in the Delhi High Court has recommended a CAG audit.

Sudhakar confirmed that the DERC’s audit showed regulatory assets to the tune of Rs 11,000 crore as of March 2012. The build-up of regulatory assets in FY13 will be finalised in the current round of tariff approvals. Based on the 26,000 million units of electricity sold by the three discoms, regulatory assets of Rs 11,000 crore require tariffs to be hiked by Rs 4.23 per unit in case the assets are to be discharged within a year. If the likely regulatory assets of Rs 7,000 crore for FY13 are added to this, the tariff will need to be raised by Rs 6.92 per unit. In November 2011, the Appellate Tribunal for Electricity had ruled after doing a suo moto review of discoms following the Shunglu committee report that all existing regulatory assets needed to be discharged within three years, and that in the future no such assets would be created.